Sunrise Homes & Renovations, Inc.

Buying a New Home This Spring? How to Avoid Overpaying as the Market Starts to Heat Up

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Buying a New Home This Spring? How to Avoid Overpaying as the Market Starts to Heat UpWhile the real estate market in most areas may slow down considerably during the winter months, activity quickly picks up in the spring time. More listings are available for buyers to choose from, but there are typically many more buyers competing for those properties. With the fast-paced and often pressure-filled market activity during the spring, it is easy for buyers to react accordingly and to overpay for the home they fall in love with. By following a few important tips, you can take steps to ensure you get a great deal on your real estate purchase.

Avoid Making Impulsive Or Emotional Decisions

There are many reasons why buyers may overpay during the spring months, and these range from the feeling that they must act quickly to make an offer on a property they love to the belief that they need to offer the asking price even if they feel the price is too high. Some may even be involved in a bidding war with another buyer, and they may structure an offer based on emotion rather than on sound real estate fundamentals. While you may need to move quickly during the spring months, you also should avoid making impulsive, emotional decisions. Spending a little time researching the property and structuring an intelligent offer will generally not kill a deal.

Create A Firm Budget

All home buyers regardless of the season should create a firm budget. This should include a personal monthly budget so that they can determine what home ownership costs are affordable for them, and it should also include a buying budget that accounts for a down payment and closing costs. Keep a trained eye on this budget, and do not deviate from it.

Be Willing To Walk Away

When you fall in love with a property and envision your family living in the space for years, it is easy to develop an emotional attachment to it. While you may be excited about a property, you also should be willing to walk away if the transaction becomes too costly for you through negotiations and counter offers. Remember that there are many other properties on the market to choose from that may be more affordable for you.

Seeking representation from a skilled real estate agent is an important step to take when buying a home. A real estate agent can help you to define your goals and to remain true to them, reminding you of your needs and specifications as well as your budget for your purchase. If you are ready to start looking for a property to purchase, seek assistance from an experienced real estate professional today.

Tax Time 2015: How Buying a New Home Can Impact the Amount of Tax You’ll Pay

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Tax Time 2015: How Buying a New Home Can Impact the Amount of Tax You'll PayFew people consider the tax implications of buying a home, but there are many. Here are a few ways buying a home can impact the amount of tax you pay.

Mortgage Interest

Most people put down the minimum amount of money needed to buy a home and finance the rest, usually over 30 years. This means that, especially in the early years of the loan, most of what they are paying are the finance charges. The good news is that all that interest is tax-deductible for people who itemize their deductions, which adds up to several thousands of dollars in deductions annually. You also can deduct interest on home equity loans, up to a certain amount.

Property Taxes

Another way that buying a home affects your taxes is property taxes. In most jurisdictions, property taxes are based to some extent on the price you pay for your home, meaning the more you pay, the higher your taxes will be. The positive is that, just as with mortgage interest, those property taxes you pay are deductible if you itemize deductions on your income tax return.

Points

Points are up-front fees you pay to lower the interest rate on your home mortgage. If you paid them when buying your home, you can deduct the entire amount on your tax return. If you paid points on a refinance or home equity loan, you have to deduct them a bit at a time over the entire term of the loan.

Tax-Free Appreciation

One of the reasons many people treat homes as an investment is the favorable tax treatment on profit from a sale. For example, in the United States as long as the home is your principal residence for at least two years out of the five years before you sell, you can exclude up to a $250,000 gain from capital gains taxes, or $500,000 if you are married.

Retirement Accounts

Buying a home for the first time is one of the few situations in which the government allows you take money from retirement accounts early without paying a tax penalty. For example, you can take up to $10,000 out of an individual retirement account without having to pay the early withdrawal penalty, although you still might face income taxes if your contributions were tax-deferred.

If you are considering buying a home, contact a real estate professional to discuss the potential tax and other benefits.

Buying and Selling a Home at the Same Time? How to Juggle These Two Transactions

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Buying and Selling a Home at the Same Time? How to Juggle These Two Transactions There are few things that can be more stressful than buying or selling a home. When you are buying and selling a home at the same time, your stress level may understandably skyrocket through the roof. There may be financial aspects of both transactions that may be cause you stress, and you may be dealing with logistical issues or simply feel stressed by the stacks of documents piling up for both transactions. While this will inevitably be a challenging time in your life, you can more easily navigate through the transactions with success by following a few tips.

Consider the Timing of Both Transactions

One of the best things you can do when buying and selling a home at the same time is to plan ahead and consider the timing of both transactions. You may get lucky enough to get an offer on your home from a buyer who wants to close just a few days before you close on your new home. However, it is more likely that these two transactions may be finalized weeks or longer apart from each other. You may need to plan on finding an interim home or paying double mortgages for a period of time. You may consider which of these two options is more preferable to you based on your work situation, your family’s needs and your budget.

Prepare a Budget Ahead of Time and Update It Periodically

Financial stress can mount during this period of time. You will need to make a good faith deposit and pay for third party reports and mortgage application fees for your new home purchase. You may also need to pay money to make repairs and to stage your current home before you list it. It is common to rent a storage unit and to pay for boxes and moving supplies as well.

In addition, a buyer for your current home may request that you make repairs to your home before closing. It is important that you prepare a budget so that you can pay for all of these expenses as they arise, and you should consider leaving yourself ample funds for unexpected expenses. If you run into a cash crunch, consider completing the sale of your current home entirely before going under contract with your new home purchase.

Use the Same Real Estate Agent for Both Transactions

The knowledge and support of a real estate agent can be beneficial to you for both transactions, and you may consider using the services of the same agent for both. Dealing with one person who is familiar with your goals and needs can be truly beneficial to you throughout the entire process, and he or she may offer insight about the best steps to take to make the transition from one home to the other smoother for your family.

While buying and selling real estate can be stressful, you do not have to make the process more difficult than it needs to be. You can set up a time to meet with a real estate agent today to begin discussing your plans and to take the initial step.

Making the Offer: 4 Ways to Craft an Offer That Will Catch the Seller’s Attention

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Making the Offer: 4 Ways to Craft an Offer That Will Catch the Seller's AttentionIt can take a time and effort to find the perfect home to purchase. After you have found that home, you need to convince the seller that your offer is the one they want to choose. There may be multiple offers made at the same time, and you may be in a situation where you are competing for the home.

Even if your offer is the only one the seller receives, there is no requirement that they must accept the offer you make. Crafting an effective offer that will catch the seller’s attention is important, and you may be able to accomplish this by following a few tips.

Offer Close To The Asking Price

One of the first things most sellers will look at when they receive an offer is the price you are offering to pay. You may feel as though the seller is asking too much for the home, and your agent may advise you to offer a lower price. On the other hand, there may be multiple offers, and you may feel as though you need to offer a price higher than what is being requested. With your real estate agent’s advice in mind, consider that a seller will be more inclined to accept an offer if it is close to what they are asking. If your offer is too low, they may decline it without looking at the other merits to your offer.

Request A Quick Closing

When you prepare your offer, one of the factors that you will have control over is the requested closing date. Sellers generally want to close quickly, but this is not always the case. Each market is unique, but a general rule of thumb is to offer a closing date that is 21 to 28 days away, contingent on mortgage approval. You may work with your real estate agent and mortgage company to determine when a reasonable closing date is. However, offering a quick closing generally shows that you are a motivated buyer.

Choose A Shorter Option Period

A sales contract has an option period, which allows the buyer to back out of the deal for any reason. This may be a time when you get your third party reports, such as the property inspection, completed. A shorter option period may be preferred by sellers. This is because the buyer is generally locked into the contract contingent on mortgage approval after the option period has expired.

Offer A Higher Non-Refundable Good Faith Amount

When you make an offer, you will also give the seller a good faith or earnest money deposit. The amount of the deposit will be disclosed in the contract, and you will typically hand it off after the offer has been accepted. This is the amount of money that you stand to lose if you do not follow through on the terms of the contract. A higher good faith or earnest money amount shows that you are serious about buying the home.

There are many factors that a seller is thinking about when reviewing an offer. While the entire offer will be reviewed fully, the fact is that these factors are generally given significant weight in most seller decisions. You can work with your real estate agent to structure the best offer possible.